N$7bn airport deal fallout… law firm sues Chinese for millions

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A Chinese construction company that lost out on a lucrative tender worth N$7 billion to upgrade the Hosea Kutako International Airport had reportedly made a commitment to pay close to N$100 million into an account designated by a local law firm.
Court documents show that Anhui Foreign Economic Construction Group, which was controversially awarded the tender to upgrade the international airport in 2015 before President Hage Geingob cancelled it in the same year, had entered into ‘a contingency agreement’ with Tjombe-Elago Incorporated, in which the local law firm was guaranteed 1.5% of the direct cost of construction of the airport
upgrade.
This was on top of other separate legal fees.

Tjombe-Elago Incorporated is co-owned by prominent human rights lawyer Norman Tjombe.
All these details have been laid bare in an ongoing case in the Windhoek High Court in which Shikongo Law Chambers, represented by Elia Shikongo, is suing the Chinese company over alleged non-payment.
According to the agreement, the estimated cost for the upgrade of the airport was in the region of US$477 853 350 (about N$7 billion) as at the April 2016 exchange rate.

This would have effectively translated to a payment of US$7.6 million (about N$105 million) had the Chinese company succeeded in appealing Geingob’s decision to cancel the tender.

“The payment will be made directly into an account designated by the firm. The payment of 1.5% will only be made when the firm is successful in the impeding litigation of the Hosea Kutako International Airport,” reads the agreement signed in Windhoek on 11 April 2016.
“Should the firm not be successful, the client will only pay the actual disbursement, travel expenses and administrative expenses and other fees actually incurred during the impending litigation.”

Shikongo Law Chambers, in its amended particulars of claim, said it is owed N$3.2 million after it was approached by Anhui in 2016 to be the company’s legal representative in the case against the Namibia Airports Company (NAC).
The appointment was made before a High Court ruling in September 2016 set aside government’s decision, directing the NAC to stop the tender for the upgrading of the international airport.
President Geingob and the ministers of finance and works appealed the High Court judgement in the Supreme Court, which later found that the airport tender was non-procedurally awarded.

‘Collaboration’

In the current court case against the Chinese company, Shikongo Law Chambers said it had proposed to be appointed in collaboration with an associate firm, Tjombe-Elago Incorporated.
This was because Shikongo Law Chambers had previously represented the NAC. The local firm said the Chinese company had agreed to the request and gave the go-ahead to appoint Tjombe-Elago Incorporated as co-operative legal practitioners during the tender cancellation appeal stage.

“A written agreement was subsequently concluded between the defendants and Tjombe-Elago Inc stipulating the terms and conditions upon which the legal services would be rendered to the defendants,” Shikongo Law Chambers stated in the particulars of claim.
The law firm admitted it was not party to the written agreement, as it has already agreed to provide its services jointly with Tjombe-Elago Inc.
Shikongo Law Chambers claim it has complied with its obligations in terms of the agreement by providing legal services to the Chinese company in collaboration with Tjombe-Elago, including attending all consultative sessions and court appearances.
In accordance with the verbal agreement, Shikongo Law Chambers said Anhui paid for its legal fees, disbursements and travel costs up until September 2017 when the Chinese company reportedly refused to make payments to Shikongo Law Chambers.

‘Millions outstanding’
“This invoice was for an amount of N$6 360 184.70. The defendants instead only paid a portion of the invoice due to Tjombe-Elago Inc, leaving the portion due to the plaintiff in the amount of N$3 180 092.35 outstanding.”
On its part, Anhui is disputing that it entered into a verbal agreement with Shikongo Law Chambers for the rendering of services, saying the firm failed to comply with High Court rules in terms of stating when, where and by whom the agreement (s) was/were concluded.
The Chinese company also stated an agreement, which was based on contingency fees of 1.5%, is null, void and alternatively unlawful, as legal practitioners in Namibia are not permitted by law to claim fees or remuneration on a contingency fee basis.
The company also dismissed that the invoice submitted for court records “does not, on face value, reflect a joint invoice, for and on behalf of the plaintiff”.

The Chinese company, which is represented by M B De Klerk and Associates, maintained Shikongo Law Chambers was conflicted and compromised as it has represented the NAC before. The defendants further term the particulars of claim as vague and embarrassing, adding the matter should be dismissed with costs.
The hearing is scheduled to take place on 6 June. Judge Herman Oosthuizen is presiding over the matter.
– mamakali@nepc.com.na